EV Battery Makers Stare at Trump Tariff Blowback

Tariffs to raise prices in US; foreign firms may flood India with cheap batteries

- Ayaan Kartik

India's electric vehicle (EV) battery makers could face collateral damage from the Trump tariffs, as foreign manufacturers unload cheap batteries here just as the local companies were ramping up production.

India's fast-growing EV market could absorb the diverted supply and drive down costs for local automakers, experts said, adding that it also spells trouble for companies such as Amara Raja Energy & Mobility Ltd, Exide Industries Ltd, Reliance Industries Ltd and Ola Electric Ltd, which are investing billions to build battery plants.

Battery makers abroad have begun looking at markets beyond the US, said an executive in charge of the battery supply chain at a leading automaker. "Not only China, but even South Korean and Japanese firms are looking at India for their battery solutions as the EV market is growing here. It will be good news for original equipment makers (OEMs) looking to get cheaper batteries as supply and competition increases," the executive added.

Chinese EV batteries started facing 25% US tariffs from November; however, South Korea and Japan have been spared so far. Last week, the US imposed a 25% tariff on all EV battery imports, with an additional 10% on all Chinese goods, which would sharply raise their prices in the US and force them to look elsewhere. India presents a juicy target: While EV sales in the US in 2024 slowed to just over 7% from 50% the previous year, and fell 1.8% in Europe, sales in India grew 27% to touch 1.94 million.